Stay informed, follow us on

BREAKBULK QUARTERLY 2008 - Burgeoning breakbulk

Worldwide and US markets to remain strong, says Rickmers executive.By Peter A. Buxbaum, AJOT“The breakbulk market worldwide, and in the United States specifically, has been very strong over the last couple of years. All indications point to the market continuing in the same strong mode.”
That is the assessment of Jerry Nagel, President and CEO of Rickmers-Linie (America) Inc., the Houston-based subsidiary of the Hamburg-based global breakbulk carrier.
Rickmers carries breakbulk cargo that cannot otherwise be containerized, such as project cargo, commodities such as plywood, steel, and pipe, machinery, rolling stock, and heavy lift and out-of-gauge products. “These are cargoes,” unlike bagged agricultural products, paper products, and wood pulp easily, “that are not readily interchanged into containers,” Nagle explained.
Rickmers-Linie currently operates seventeen owned and chartered multipurpose vessels on its worldwide routes. The carrier’s “claim to fame,” as Nagle put it, is its eastbound Round-The-World Pearl String Service, with nine vessels providing semiweekly liner voyages connecting North America with northern Europe, the Mediterranean, Southeast Asia, and north Asia. Rickmers also operates a monthly liner service from Europe to the Middle East and Indian Subcontinent and back, as well as a monthly westbound liner service from the US East Coast to north China, South Korea and Japan.
“The Asia-US trades look very strong in both directions over the next few years,” Nagle said. Cargoes from Asia to the United States include capital goods such as components for power plants, other materials for infrastructure projects, as well as commodities such as plywood and pipe. Cargoes outbound from the US to Asia include large amounts of project cargo, particularly components for energy exploration and production, such as for offshore drilling platforms. The US-Europe trade also includes project cargoes, much of which is destined for Eastern Europe, Russia, and Africa.
The Middle East is a booming market for project cargoes, thanks to the spike in oil prices, and includes power plants, refineries, chemical plants, and the gamut of energy production equipment, as well as equipment for the construction of airports, highways, and bridges. “It is really a mixture of anything that can be used build anything,” Nagle said. “Sometimes when I go down to the pier, it looks like a bunch of erector set parts.”
Last year, Rickmers-Linie was commissioned to transport the most valuable cargo it ever handled, a Japanese-made component for the International Space Station, the Experiment Logistics Module ñ Pressurized Section (ELM-PS). The carrier transported the component from Yokohama to Port Canaveral, on board the Rickmers New Orleans, one of the nine ships plying the Round-the-World Pearl String service. The ELM-PS was later launched into space aboard the space shuttle Endeavor in February 2008.
The ELM-PS is part of a Japanese experimental module dubbed Kibo, Japan’s first human space facility and its primary contribution to the ISS. Kibo provides an environment in which astronauts can conduct scientific experiments. The ELM-PS serves as a storage area for materials, tools and supplies.
Nagle considers the module to be the most precious cargo ever carried by Rickmers. “In terms of size and weight, it was nothing to write home about,” he said, but it was insured for several times the vessel itself.
One of the driving forces behind the strength of the breakbulk market, from the carrier’s point of view, is the shortage of multipurpose vessels. Multipurpose vessels are capable of handling breakbulk cargo of different configurations and are also adaptable to handle containers when need be.
“Once you contract for a container ship and install cell guides to rack containers, you can’t put pipe in the hold,” Nagle explained. “Multipurpose vessels have a big square hatch to stack pipe or containers.”
The shortage of vessels came about over the last five years as older vesse

Peter Buxbaum

Peter Buxbaum has been writing about international trade and transportation, as well as security, defense, technology, and foreign policy, for over 20 years. Besides contributing to the AJOT, Buxbaum's work has appeared in such leading publications as [em]Fortune, Forbes, Chief Executive, Computerworld, and Jane's Defence Weekly[/em]. He was educated at Columbia University.